From: Reuters
Published February 19, 2008 11:26 AM

Iraq agrees $5 bln Boeing, Bombardier plane deal

By Wisam Mohammed

BAGHDAD (Reuters) - Iraq said it had agreed to buy aircraft from planemaker Boeing <BA.N> and Canada's Bombardier <BBDb.TO> in a deal worth up to $5 billion.

Iraq's national carrier grounded its planes in the early 1990s due to United Nations sanctions, and much of the carrier's fleet and assets were destroyed during the 2003 U.S.-led war and in subsequent looting. It resumed international flights in 2004.

"A ministerial committee was formed and has agreed to buy 40 planes from Boeing, and four other used ones from Boeing and six new planes from Bombardier," deputy Transport Minister Bangeen Riqani told Reuters.

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A government statement said Iraq had also agreed an option for 10 more Boeing aircraft. The first of the jets are due for delivery in 2015, and the Canadian aircraft are due this year and in 2009, Riqani said.

Upon delivery of the new Boeing aircraft, national carrier Iraqi Airways plans to expand its network from the Middle East into Europe, India and China, said an Iraqi aviation official, who declined to be named.

Some of Iraq's current planes are so old some countries do not accept them at their airports for safety reasons, the official said.

Iraq chose Boeing aircraft and not those of French rival Airbus <EAD.PA> because technicians and pilots are more used to planes from the U.S. planemaker, the official said.

The purchase is the first major order since at least the 1980s, the official said. Iraq's fitful attempts to rebuild its shattered economy have been hard hit by a Sunni Arab-led insurgency and sectarian strife.

Some planes still fly into Baghdad airport at a steep angle to avoid missile fire. A barrage of rockets landed close to Baghdad airport on Monday, killing five people, the U.S. military said.

(Additional reporting by Mohammed Abbas; Editing by Erica Billingham)

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